In
the Hinterlands, just past the gate town of Xaos, lies
what is commonly called the Lost Valley. This is because
things lost (both literally and figuratively) often end
up here. A mystical city lies here, very few people are
let into it and rumour has it that advanced magic runs
much of the city. What is known is that the lost
souls that live here are the last remnants of some lost
civilization. Apparently the Lost Valley was once only a
place where things that were misplaced occasionally
appeared (a lot of luggage, socks, and hair). That was
true until the mystical city in the prime started to
fall. The mystical and psionic effects maintained by the
king were twisted as the king slowly was losing his
sanity.

Taking
the idea of the legendary "lost realm" a bit literally
these clueless actually managed to send an entire city
into the planes. Here their belief in finding his lost
mind changed the nature of the realm. Now lost marbles,
lost battles, and lost causes are just as likely to
appear as stuff literally lost. Of course most lost stuff
doesn't appear here anyway, it's just misplaced, but
every so often a portal appears taking missing items
here. Well, the chant goes that the city is now in the
Outlands and the king has still lost his marbles but the
dark isn't truely known. It's suspected that this realm
has several sects that follow lost causes
however.